Ho Hum! Another Blah Quarter for Fios

Carrier's fiber-based broadband and video platform chalks up sluggish data sub gains with so-so video sub losses once again in its third-quarter earnings report.

Alan Breznick, Cable/Video Practice Leader, Light Reading

October 28, 2019

3 Min Read
Ho Hum! Another Blah Quarter for Fios

With its focus squarely on 5G wireless, Verizon is not exactly boasting about its Fios wireline business these days. And it's easy to see why. Once the apple of Verizon's eye, Fios has been racking up lackluster quarter after lackluster quarter for several years now.

The latest quarter was certainly no exception to this rule. In its Q3 earnings release Friday, Verizon reported that Fios added a middling number of residential broadband subscribers, netting 30,000 new customers. That total came in short of Wall Street's consensus estimate and represents a sizable decline from 48,000 net adds in the year-earlier period. The gain was also not enough to offset a corresponding drop of 35,000 DSL subscribers, leaving Verizon with 5,000 fewer broadband subs overall.

As a result, Verizon closed out September with nearly 5.9 million Fios Internet customers and about 6.5 million total broadband subs as its DSL base continues to dwindle rapidly. </>

Like other legacy pay-TV providers, Verizon's Fios unit also continued to shed residential video customers at a steady clip, losing 67,000 subs to lower its grand total to 4.2 million. But at least that loss was pretty much in line with both last year's video sub loss (67,000) and Wall Street's consensus forecast.

Those numbers explain why Fios did not exactly stand out in a company earnings report that mainly drooled about the company's 5G prospects. In fact, Craig Moffett, principal analyst at MoffettNathanson, notes that Verizon's overall wireline operation showed weakness in nearly every financial metric and category, including retail, business and enterprise.

"Ugh," Moffett wrote in a note to investors on Friday. "It's hard to work up much enthusiasm for the conclusion that, as is seemingly the case every quarter, wireline results were worse than expected."

As noted in Light Reading's coverage of Verizon's second-quarter earnings in August, Fios does continue to chug right along. Despite the seemingly endless erosion of its video subscriber base, the Fios consumer unit boosted its total revenues by 1.7%, which the company credited "primarily due to the demand" for its broadband offerings.

But that increase was one of the few bright spots for Fios and the entire wireline unit in the company's summer earnings report. So it's no wonder that Verizon is pinning so much of its hopes on wireless in general, and 5G in particular, these days.

"The weakness in Wireline this quarter was so severe that it may deflect attention from Wireless," Moffett wrote. "But Wireless is still the core business, and the future of wireless is still 5G. So what happens in 5G is what matters."

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— Alan Breznick, Cable/Video Practice Leader, Light Reading

About the Author(s)

Alan Breznick

Cable/Video Practice Leader, Light Reading

Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.

As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.

Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.

He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.

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